M&T BANK CORPORATION 2018 ANNUAL REPORT

M&T BANK CORPORATION 2018 ANNUAL REPORT

AMERICAN VISIONARY ART MUSEUM BALTIMORE, MARYL AND

AVAM is a congressionally designated national museum opened in 1995 with a mission to display intuitive works by self-taught artists. Situated in the historic Federal Hill district of Baltimore's Inner Harbor, AVAM is devoted to inspiring creative and compassionate acts of social justice through intergenerational public programming and meaningful exhibition themes.

Proud to promote the innovation and unique creativity of artists who have set themselves apart, AVAM is a premier Maryland art destination. M&T Bank supports AVAM and its vision.

COVER ART

Artist Andrew Logan was born in 1945 in Oxford, England. He spent a year of his life in the United States, and describes himself as an eccentric who challenges convention. Logan incorporates themes of plants, animals, outer space and mythology into his work.

Commissioned for AVAM, Cosmic Galaxy Egg's shape symbolizes life. In addition, its mosaic mirrored shell represents space and time, and even includes Hubble Telescope images of dying galaxies and newborn stars.

This is the latest in the series of annual reports featuring works and artists with strong connections to the communities served by M&T Bank.

Andrew Logan, Cosmic Galaxy Egg, 2004, polystyrene, resin, glass and glitter, 244 cm x 122 cm, American Visionary Art Museum, Baltimore, MD. Photograph courtesy of Paul Burk / American Visionary Art Museum.

M&T BANK CORPORATION

C O N T E N T S Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii Message to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv Officers and Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxxiii United States Securities and Exchange Commission (SEC) Form 10-K . . . . xxxvi

A N N U A L M E E T I N G The annual meeting of shareholders will take place at 11:00 a.m. on April 16, 2019 at One M&T Plaza in Buffalo.

P R O F I L E M&T Bank Corporation is a bank holding company headquartered in Buffalo, New York, which had assets of $120.1 billion at December 31, 2018. M&T Bank Corporation's subsidiaries include M&T Bank and Wilmington Trust, National Association.

M&T Bank has banking offices in New York State, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Virginia, West Virginia and the District of Columbia. Major subsidiaries include:

M&T Insurance Agency, Inc. M&T Real Estate Trust M&T Realty Capital Corporation

M&T Securities, Inc. Wilmington Trust Company Wilmington Trust Investment Advisors, Inc.

M&T BANK CORPORATION AND SUBSIDIARIES

Financial Highlights

For the year Performance

2018

2017 Change

Net income (thousands) . . . . . . . . . . . . . . . . . $ 1,918,080 Net income available to common

shareholders--diluted (thousands) . . . . $ 1,836,035 Return on

Average assets . . . . . . . . . . . . . . . . . . . . . . . . 1.64% Average common equity . . . . . . . . . . . . . . 12.82% Net interest margin . . . . . . . . . . . . . . . . . . . . . 3.83% Net charge-offs/average loans . . . . . . . . . . . .15%

$ 1,408,306

1,327,517

1.17 % 8.87% 3.47% .16%

+ 36% + 38%

Per common share data

Basic earnings . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12.75 Diluted earnings . . . . . . . . . . . . . . . . . . . . . . . . 12.74 Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . 3.55

$ 8.72 8.70 3.00

+ 46% + 46% + 18%

Net operating (tangible) results(a)

Net operating income (thousands) . . . . . . . $ 1,936,155 Diluted net operating earnings

per common share . . . . . . . . . . . . . . . . . . . 12.86 Net operating return on

Average tangible assets . . . . . . . . . . . . . . . . 1.72% Average tangible common equity . . . . . . 19.09% Efficiency ratio(b) . . . . . . . . . . . . . . . . . . . . . . . 54.79%

At December 31

Balance sheet data (millions) Loans and leases, net of unearned discount . . . . . . . . . . . . . . $ 88,466

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,097 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,157 Total shareholders' equity . . . . . . . . . . . . . . . 15,460 Common shareholders' equity . . . . . . . . . . . 14,225

$ 1,427,331

8.82

1.23% 13.00% 55.07%

$ 87,989 118,593 92,432 16,251 15,016

+ 36% + 46%

+ 1% + 1% - 2% - 5% - 5%

Loan quality

Allowance for credit losses to total loans . 1.15% Nonaccrual loans ratio . . . . . . . . . . . . . . . . . . 1.01%

1.16% 1.00%

Capital

Common equity Tier 1 ratio . . . . . . . . . . . . . 10.13% Tier 1 risk-based capital ratio . . . . . . . . . . . . 11.38% Total risk-based capital ratio . . . . . . . . . . . . 13.68% Leverage ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 9.88% Total equity/total assets . . . . . . . . . . . . . . . . . 12.87% Common equity (book value) per share . . $ 102.69 Tangible common equity per share . . . . . . . 69.28 Market price per share

Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143.13 High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197.37 Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133.78

10.99% 12.26% 14.75% 10.31% 13.70% $ 100.03

69.08

170.99 176.62 141.12

+ 3% --

- 16%

(a)Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. A reconciliation of net income and net operating income appears in Item 7, Table 2 in Form 10-K.

(b)Excludes impact of merger-related expenses and net securities gains or losses.

ii

DILUTED EARNINGS PER COMMON SHARE

2014 2015 2016 2017 2018

SHAREHOLDERS' EQUITY PER COMMON SHARE AT YEAR-END

2014 2015 2016 2017 2018

$7.57 $7.74 $8.08 $8.82 $12.86 $7.42 $7.18 $7.78 $8.70 $12.74 Diluted net operating earnings per common share(a) Diluted earnings per common share

NET INCOME In millions 2014 2015 2016 2017 2018

$83.88 $93.60 $97.64 $100.03 $102.69 $57.06 $64.28 $67.85 $ 69.08 $ 69.28 Shareholders' equity per common share at year-end Tangible shareholders' equity per common share at year-end

RETURN ON AVERAGE COMMON SHAREHOLDERS' EQUITY

2014 2015 2016 2017 2018

$1,086.9 $1,156.6 $1,362.7 $1,427.3 $1,936.2 $1,066.2 $1,079.7 $1,315.1 $1,408.3 $1,918.1

Net operating income(a) Net income

13.76% 13.00% 12.25% 13.00% 19.09% 9.08% 8.32% 8.16% 8.87% 12.82%

Net operating return on average tangible common shareholders' equity(a)

Return on average common shareholders' equity

(a)Excludes merger-related gains and expenses and amortization of intangible assets, net of applicable

income tax effects. A reconciliation of net operating (tangible) results with net income is included

in Item 7, Table 2 in Form 10-K.

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MESSAGE TO SHAREHOLDERS

iv

Our 2018 results reflect a confluence of events that produced

exceptional improvement in our operations, earnings and level of return for shareholders.

After a long period of compression, caused by almost a decade of near zero interest rates, margins expanded as the Federal Reserve continued to raise interest rates. While rates rose, consumers and businesses alike found value in retaining uncharacteristically high cash balances with banks. In fact, last year our customers held 23 percent of deposits in transaction accounts, 13 percentage points higher than before the financial crisis. In 2018, net interest margin reached a level not seen since 2010.

The health of our customer base proved strong, leading to the lowest level of net charge-offs that we have experienced in the last 31 years.

The cost of significant investments during the year in talent, technology and marketing, which enhanced customer experience and awareness, was masked to some extent by the elimination of the FDIC large bank surcharge, as the Deposit Insurance Fund achieved its statutorily required minimum reserve ratio of 1.35 percent.

The Tax Cuts and Jobs Act, implemented last year, dramatically increased earnings available for reinvestment in our business or return to our shareholders.

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All of these factors combined to produce a return on tangible common equity not seen since 2012.

At the same time, loan growth was characterized as slow or challenged relative to past cycles, due to strong competition from banks and nonbanks alike for a limited pool of loans, particularly commercial and industrial loans. While originations were healthy, they were offset by payoffs, pay-downs or refinances, as customers took advantage of the lower pricing or the most favorable terms and conditions available from new forms of lenders. At times like these, our disciplined capital allocation philosophy often results in tempered loan growth--as asset prices inflate and the number of capital providers expands, making credit widely available.

The combination of higher revenues, lower credit costs and the change in tax policy provided more capital than could effectively be put to use by, or in the service of, customers and communities.

A hallmark of M&T has been the prudent deployment of capital when and where it makes sense. Our first priority is to invest in our own business and in the communities in which we operate by extending credit to our customers or, periodically, in expansion through acquisition. When returns offered in those areas appear inadequate, we prefer to return excess capital to shareholders--hopefully enabling its deployment into alternative, higher returning investments, perhaps outside the financial services sector in which M&T operates.

Recently, there has been significant debate over the record amount of capital distributions by banks and other financial institutions, with estimates exceeding $150 billion being returned in the last year. Some argue that it would be more reasonable for banks, like M&T, to

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